Incentives were big part of package for MetroTech

Wednesday, November 30, 2005

By Christopher Montgomery
Plain Dealer Reporter

New York – Forest City Enterprises Inc. had ample government help in developing Brooklyn’s MetroTech office park.

Among the incentives the developer was able to offer tenants: exemptions for property and commercial rent taxes, $3,000 income tax credits for employees moved to MetroTech, and reductions in electric and gas costs. The project also received at least $41 million in grants and other assistance to improve infrastructure and spur construction.

Similar incentives were offered in another deal that came along in 1985. Forest City wanted Morgan Stanley to move into MetroTech, but the investment bank was already committed to New Jersey and didn’t want to wait for the Brooklyn project.

The city offered a piece of land it owned nearby that Forest City could develop more quickly. Morgan Stanley agreed and moved in by 1988.

Added together, the public subsidies for MetroTech and the Morgan Stanley building total in the hundreds of millions of dollars. It would be hard to argue that they didn’t work.

MetroTech has filled its site with 11 buildings that hold more than 7 million square feet of space, one of the largest office complexes in the city. It has brought about 22,000 jobs to Brooklyn.

The government help has become the calling card of Bruce Ratner, head of Forest City’s New York operations.

“He’s the master of subsidy. No one does it better,” said Fred Siegel, a professor of history at the Cooper Union for the Advancement of Science and Art in New York who focuses on urban issues. “That’s not a flat-out criticism of him. It’s just that he never builds without someone else taking the risk.”

In addition to receiving the subsidies, Forest City leases lots of space to city agencies. MetroTech’s tenants include the headquarters of the Fire Department and Department of Information Technology and Telecommunications.

Forest City argues that MetroTech and many of its other urban developments wouldn’t have happened without public assistance.